JUDGMENT OF THE GENERAL COURT (Seventh Chamber)

5 February 2015 (*)

(Community trade mark — Opposition proceedings — Application for Community figurative mark representing a wolf’s head — Earlier national and international figurative marks WOLF Jardin and Outils WOLF — Relative ground for refusal — Article 8(5) of Regulation (EC) No 207/2009)

In Case T‑570/10 RENV,

Environmental Manufacturing LLP, established in Stowmarket (United Kingdom), represented by S. Malynicz, Barrister, and M. Atkins, Solicitor,

applicant,

v

Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), represented by A. Folliard-Monguiral, acting as Agent,

defendant,

the other party to the proceedings before the Board of Appeal of OHIM, intervener before the General Court, being,

Société Elmar Wolf, established in Wissembourg (France), represented by N. Boespflug, avocat,

ACTION brought against the decision of the Second Board of Appeal of OHIM of 6 October 2010 (Case R 425/2010-2), relating to opposition proceedings between Société Elmar Wolf and Environmental Manufacturing LLP,

THE GENERAL COURT (Seventh Chamber),

composed of M. van der Woude (Rapporteur), President, I. Wiszniewska-Białecka and I. Ulloa Rubio, Judges,

Registrar: I. Dragan, Administrator,

having regard to the written procedure and further to the hearing on 2 October 2014,

gives the following

Judgment

 Background to the dispute

1        On 9 March 2006, Entec Industries Ltd, the predecessor in law to the applicant, filed an application for registration of a Community trade mark at the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) under Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1), as amended (replaced by Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (OJ 2009 L 78, p. 1)).

2        The mark in respect of which registration was sought is the following figurative sign:

3        The goods for which registration was sought, following the restriction made during the procedure before OHIM, are in Class 7 of the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended, and correspond to the following description: ‘Machines for professional and industrial processing of wood and green waste; professional and industrial wood chippers and shredders’.

4        The Community trade mark application was published in Community Trade Marks Bulletin No 38/2006 of 18 September 2006.

5        On 18 December 2006, the intervener, Société Elmar Wolf, filed a notice of opposition, under Article 42 of Regulation No 40/94 (now Article 41 of Regulation No 207/2009), against registration of the mark applied for in respect of the goods referred to in paragraph 3 above.

6        The opposition was based, inter alia, on the following earlier rights:

–        the French figurative mark, registered on 8 April 1999 under number 99786007, covering goods in Classes 1, 5, 7, 8, 12 and 31, of which the figurative sign in red and yellow is reproduced below:

–        the French figurative mark, registered on 22 September 1948 under number 1480873 for goods in Classes 7 and 8, the international figurative mark, registered on 22 June 1951 under number 154431, covering goods in Classes 7 and 8, with effect in Spain and in Portugal, and the international figurative mark, registered on 20 January 1969 under number 352868, covering goods in Classes 7, 8, 12 and 21, with effect in Spain. The figurative sign in black and white corresponding to those three marks is reproduced below:

7        The grounds invoked in support of the opposition were those referred to in Article 8(1)(b) and Article 8(5) of Regulation No 40/94 (now Article 8(1)(b) and Article 8(5) of Regulation No 207/2009, respectively).

8        On 24 September 2007, the applicant’s predecessor in law assigned the application for registration to the applicant. On 2 October 2007, the applicant requested, in accordance with Article 43 of Regulation No 40/94 (now Article 42 of Regulation No 207/2009), that the intervener adduce evidence of use of the earlier marks. The intervener then presented documentary evidence to that effect.

9        On 25 January 2010, the Opposition Division of OHIM dismissed the opposition based on Article 8(1)(b) of Regulation No 207/2009 on the ground that there was no likelihood of confusion. The Opposition Division also dismissed the opposition based on Article 8(5) of that regulation on the ground that the intervener had not adduced evidence of any detriment to the repute of the earlier marks or any unfair advantage gained from them.

10      On 23 March 2010, the intervener appealed against the decision of the Opposition Division.

11      By decision of 6 October 2010 (‘the contested decision’), the Second Board of Appeal of OHIM annulled the decision of the Opposition Division, upholding the opposition based on Article 8(5) of Regulation No 207/2009.

12      First, the Board of Appeal upheld the Opposition Division’s finding that the relevant public consisted of the general public in France, Portugal and Spain and that that public is reasonably well informed and reasonably observant.

13      Secondly, with regard to Article 8(5) of Regulation No 207/2009, the Second Board of Appeal found that the earlier marks were highly reputed in three Member States. Next, it found that there was a degree of similarity between the marks at issue and that the relevant public might establish a link between the signs, in the light of the high reputation of the earlier marks and the fact that the goods covered by the earlier marks and those covered by the mark applied for were identical or very similar. Finally, the Board of Appeal found, taking into account the high reputation of the earlier marks, the very distinctive character of the earlier marks, the fact that the goods at issue were identical or similar and the degree of similarity between the marks, that the mark applied for could be detrimental to the distinctive character of the earlier marks (‘the risk of dilution’) and that it could take unfair advantage of their highly distinctive character or reputation (‘the risk of free-riding’). In the light of that finding, the Board of Appeal considered that it was not necessary to examine the merits of the plea based on Article 8(1)(b) of Regulation No 207/2009.

14      Thirdly and finally, as regards Article 42(2) and (3) of Regulation No 207/2009, the Board of Appeal found that the earlier marks had been put to genuine and continuous use for the goods concerned.

 Procedure before the General Court and the Court of Justice

15      By application lodged at the Registry of the General Court on 17 December 2010, the applicant brought an action for the annulment of the contested decision and the award of costs against OHIM. In support of its action, the applicant relied on two pleas in law. The first plea in law alleged infringement of Article 42(2) and (3) of Regulation No 207/2009. By the second plea in law, the applicant alleged infringement of Article 8(5) of that regulation, in so far as the Board of Appeal found that there was a risk of dilution and a risk of free-riding.

16      By judgment of 22 May 2012 in Environmental Manufacturing v OHIM — Wolf (Representation of a wolf’s head) (T‑570/10, ECR, EU:T:2012:250; ‘the contested judgment’), the General Court (Fourth Chamber) dismissed the action in its entirety and ordered the applicant to pay the costs.

17      The General Court, in paragraphs 16 to 24 of the contested judgment, dismissed the applicant’s first plea in law as unfounded.

18      As regards the second plea in law, examined in paragraphs 25 to 68 of the contested judgment, the General Court considered the applicant’s complaints only in so far as they concerned the risk of dilution.

19      In the context of that analysis, the General Court first rejected as ineffective the applicant’s complaint alleging that the Board of Appeal had committed an error in law in its definition of the relevant public. The General Court, like the applicant, pointed out that the Board of Appeal had not identified the relevant public relative to the type of injury it had examined under Article 8(5) of Regulation No 207/2009. However, the General Court stated that the Board of Appeal was correct to use the public targeted by the earlier marks for the purposes of the assessment of the risk of dilution.

20      Next, the General Court upheld the finding of the Board of Appeal that the relevant public might establish a link between the signs represented by the marks at issue.

21      Finally, the General Court rejected the applicant’s argument that the proprietor of the earlier mark must specifically plead and prove that use of the later mark will have an effect on the behaviour of the consumers of the goods covered by the earlier mark or that there is a serious risk thereof in the future, since the mere mention of dilution is insufficient to justify the application of Article 8(5) of Regulation No 207/2009. According to the General Court, the change in the economic behaviour of the consumer, to which the applicant refers, can be established if the proprietor of the earlier mark has shown that the mark’s ability to identify the goods or services for which it is registered and used is weakened, since use of the later mark leads to dispersion of the identity and hold upon the public mind of the earlier mark. The Board of Appeal had correctly applied those principles in the present case.

22      In those circumstances, the General Court concluded that the Board of Appeal was correct to take the view that the use of the mark applied for posed a risk of dilution to the earlier marks.

23      On that basis, the General Court rejected the applicant’s second plea in law as unfounded, without considering the applicant’s arguments regarding the risk of free-riding, on which the contested decision was also based.

24      By document lodged at the Registry of the Court of Justice on 8 August 2012, the applicant brought an appeal requesting the Court to set aside the contested judgment, to give final judgment on the dispute, and to order OHIM and the intervener to pay the costs. In support of its appeal, the applicant raised a single plea in law, alleging infringement of Article 8(5) of Regulation No 207/2009.

25      By judgment of 14 November 2013 in Environmental Manufacturing v OHIM (C‑383/12 P, ECR, EU:C:2013:741, ‘judgment of the Court of Justice’), the Court of Justice set aside the contested judgment, referred the case back to the General Court and reserved the costs.

26      In its judgment the Court of the Justice found as follows:

‘34      According to the Court’s case-law, proof that the use of the later mark is, or would be, detrimental to the distinctive character of the earlier mark requires evidence of a change in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered, consequent on the use of the later mark, or a serious likelihood that such a change will occur in the future (Intel Corporation, paragraphs 77 and 81, and also paragraph 6 of the operative part of the judgment).

35      Admittedly, paragraph 77 of the Intel Corporation judgment, which begins with the words “[i]t follows that”, immediately follows the assessment of the weakening of the ability to identify and the dispersion of the identity of the earlier mark; it could thus be considered to be merely an explanation of the previous paragraph. However, the same wording, reproduced in paragraph 81 and in the operative part of that judgment, is autonomous. The fact that it appears in the operative part of the judgment makes its importance clear.

36      The wording of the above case-law is explicit. It follows that, without adducing evidence that that condition is met, the detriment or the risk of detriment to the distinctive character of the earlier mark provided for in Article 8(5) of Regulation No 207/2009 cannot be established.

37      The concept of “change in the economic behaviour of the average consumer” lays down an objective condition. That change cannot be deduced solely from subjective elements such as consumers’ perceptions. The mere fact that consumers note the presence of a new sign similar to an earlier sign is not sufficient of itself to establish the existence of a detriment or a risk of detriment to the distinctive character of the earlier mark within the meaning of Article 8(5) of Regulation No 207/2009, in as much as that similarity does not cause any confusion in their minds.

38      The General Court, at paragraph 53 of the judgment under appeal, dismissed the assessment of the condition laid down by the Intel Corporation judgment, and, consequently, erred in law.

39      The General Court found, at paragraph 62 of the judgment under appeal, that “the fact that competitors use somewhat similar signs for identical or similar goods compromises the immediate connection that the relevant public makes between the signs and the goods at issue, which is likely to undermine the earlier mark’s ability to identify the goods for which it is registered as coming from the proprietor of that mark”.

40      However, in its judgment in Intel Corporation, the Court clearly indicated that it was necessary to demand a higher standard of proof in order to find detriment or the risk of detriment to the distinctive character of the earlier mark, within the meaning of Article 8(5) of Regulation No 207/2009.

41      Accepting the criterion put forward by the General Court could, in addition, lead to a situation in which economic operators improperly appropriate certain signs, which could damage competition.

42      Admittedly, Regulation No 207/2009 and the Court’s case-law do not require evidence to be adduced of actual detriment, but also admit the serious risk of such detriment, allowing the use of logical deductions.

43      None the less, such deductions must not be the result of mere suppositions but, as the General Court itself noted at paragraph 52 of the judgment under appeal, in citing an earlier judgment of the General Court, must be founded on “an analysis of the probabilities and by taking account of the normal practice in the relevant commercial sector as well as all the other circumstances of the case”.

44      However, the General Court did not criticise the failure to conduct that analysis, contrary to the case-law cited in its own judgment.

45      With respect to [the intervener’s] argument that the criterion identified by the Court in the Intel Corporation judgment concerns goods or services that are not similar to the goods or services covered by a later mark and is not, therefore, applicable in the present case, it is sufficient to note that, having regard to its general wording, the case-law referred to at paragraphs 77 and 81 and also at paragraph 6 of the operative part of that judgment cannot be interpreted as being limited to the factual circumstances involving goods or services that are not similar to the goods or services covered by a later mark.

46      In those circumstances, it must be held that the appeal is well founded.

47      Accordingly, the judgment under appeal must be set aside.’

 Procedure and forms of order sought by the parties after referral back

27      The case at issue was assigned to the Seventh Chamber of the General Court.

28      Pursuant to Article 119(1) of the Rules of Procedure of the General Court, the applicant, OHIM and the intervener lodged statements of written observations.

29      The applicant claims that the General Court should:

–        annul the contested decision;

–        order OHIM and the intervener to pay the costs.

30      OHIM contends that the General Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

31      The intervener claims that the General Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

 Law

32      As a preliminary point, it should be borne in mind that the applicant put forward two pleas in law in support of its action, alleging, first, infringement of Article 42(2) and (3) of Regulation No 207/2009 and, secondly, infringement of Article 8(5) of that regulation.

33      In its written observations and at the hearing, the applicant indicated that it was no longer necessary for the Court to rule on its first plea for annulment. The General Court will accordingly examine only the complaints put forward by the applicant in the context of its second plea.

34      Those complaints allege infringement of Article 8(5) of Regulation No 207/2009, as regards both the risk of dilution and that of free-riding.

 The risk of dilution

35      The applicant claims that, in the light of the judgment of the Court of Justice, paragraph 25 above (EU:C:2013:741), its complaint alleging infringement of Article 8(5) of Regulation No 207/2009, concerning the risk of dilution, is well founded. The intervener has not provided any evidence of the existence of any change in the economic behaviour of the average consumer of the goods in respect of which the earlier marks were registered as a result of the use of the mark applied for, or a serious likelihood that such a change would occur in the future. According to the applicant, the intervener did not even address that issue in its written pleadings. Similarly, the Board of Appeal also made no reference to the potential effect on the economic behaviour of consumers of the goods covered by the earlier marks.

36      OHIM submits that it is no longer necessary for the General Court to rule on the risk of dilution, in so far as the Court of Justice took the view, in paragraph 44 of its judgment, that the General Court failed to criticise, in disregard of the case-law cited in the contested judgment, the Board of Appeal’s failure to conduct an analysis of the economic effects.

37      The intervener notes that the judgment of the Court of Justice, paragraph 25 above (EU:C:2013:741), allows the use of logical deductions. In the present case, the existence of a serious risk that the consumer of the goods covered by the earlier mark might change his economic behaviour could be logically deduced, first, from the reputation and the highly distinctive character of the earlier marks, and secondly, from the fact that the goods concerned are identical or highly similar. The intervener emphasises in that respect that a mark consisting of a canine’s head is unique in the relevant commercial sector and that there is no good reason for the applicant to choose a trade mark representing such a canine’s head.

38      As is apparent from paragraph 34 of the judgment of the Court of Justice, paragraph 25 above (EU:C:2013:741), proof that the use of the later mark is, or would be, detrimental to the distinctive character of the earlier mark requires evidence of a change in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered, consequent on the use of the later mark, or a serious likelihood that such a change will occur in the future (judgment in Intel Corporation, C‑252/07, ECR, EU:C:2008:655, paragraphs 77 and 81, and also paragraph 6 of the operative part of the judgment).

39      In this instance, the Court of Justice pointed out, in paragraphs 38 and 44 of its judgment, that the General Court erred in law by failing to criticise, in disregard of the case-law cited in its own judgment, the Board of Appeal’s failure to conduct an analysis of the effects of the use of the mark applied for on the economic behaviour of the average consumer of the goods covered by the earlier marks.

40      In that regard, it must be noted that, contrary to what it suggests, the intervener did not put forward any argument before OHIM to establish the existence of a risk of the consumer of the goods in respect of which the earlier marks were registered changing his economic behaviour. As the applicant points out, the intervener did not mention, during the proceedings before OHIM, the possibility of any change in the economic behaviour of the consumer.

41      In those circumstances, the applicant’s complaint alleging infringement of Article 8(5) of Regulation No 207/2009 must be upheld, in so far as the Board of Appeal incorrectly found that there was a risk of dilution.

 The risk of free-riding

42      It should be noted at the outset that the General Court took the view, in paragraph 67 of the contested judgment, that in so far as the Board of Appeal had correctly applied Article 8(5) of Regulation No 207/2009 on account of the risk of dilution, it was no longer necessary to give a ruling on the risk of free-riding, on which the contested decision was also based.

43      As the applicant’s complaint challenging the risk of dilution was upheld in paragraphs 36 to 42 of the present judgment, it is now for the General Court to verify whether the Board of Appeal was justified in finding that there was a risk of free-riding in the present case.

44      In that regard, the applicant claims that the concept of free-riding covers, in particular, cases where, by reason of a transfer of the image of the mark or of the characteristics which it projects to the goods identified by the identical or similar sign, there is clear exploitation on the coat-tails of the mark with a reputation. It follows, according to the applicant, that the risk of free-riding requires the existence of some benefit or some usefulness in appropriating the image of the earlier mark. Even though the Board of Appeal had referred to those principles in the contested decision, it never actually established that there was clear exploitation and image transfer in the present case. In its observations before the Board of Appeal, the intervener merely asserted that there was a risk of free-riding, without addressing the issue whether the use of the mark applied for amounted to an image transfer or gave a marketing boost. According to the applicant, the image conveyed by the earlier marks is of no relevance to the users of the goods covered by the mark applied for in so far they are professional users, as distinct from occasional users who are part of the general public targeted by the earlier marks. Finally, in the absence of a risk of dilution, the Board of Appeal could not have relied on such a risk in the context of its analysis of the risk of free-riding in paragraphs 35 and 36 of the contested decision.

45      OHIM observes that the error noted by the General Court in the definition of the relevant public by the Board of Appeal (see paragraph 19 above) has no impact on its assessment of the risk of free-riding. The fact that the goods covered by the mark applied for are aimed mainly at professionals does not, in any way, alter the finding that they could be sold in the same retail outlets as those covered by the earlier marks. The professional public, faced with goods identified by the mark applied for, will be inclined to buy those goods owing to the association made with the earlier marks. The memory of the earlier marks and their ‘aura’ of quality will trigger an immediate positive association from which the mark applied for will benefit. The applicant therefore exploits, without paying any financial compensation and without being required to make efforts of its own in that regard, the marketing effort expended by the intervener in order to create and maintain the image of the earlier marks. Finally, the Board of Appeal examined dilution and free-riding separately.

46      The intervener submits that it provided proof that the earlier marks have been used in trade for decades and that they have been continuously promoted. The risks of misappropriation of the reputation of the earlier marks are all the more obvious in that the use of a mark with a canine’s head in the sector concerned is unique and that the goods are identical or at least highly similar. In that regard, the applicant never explained the reasons which led it to choose precisely the sign represented in the mark applied for. The combination of the reputation of the mark and the similarity of the goods may, according to the intervener, suffice to establish that there is a risk of free-riding. Finally, the intervener submits that, as the ground of dilution is well-founded, the Board of Appeal could include it in its assessment of the risk of free-riding. In any event, the dilution is only one of the aspects of the global assessment of the risk of free-riding carried out by the Board of Appeal.

47      It must be noted that the concept of taking unfair advantage of the distinctive character or the repute of the earlier mark, referred to in Article 8(5) of Regulation No 207/2009, encompasses instances where there is clear exploitation and free-riding on the coat-tails of a famous mark or an attempt to trade upon its reputation (judgment of 25 May 2005 in Spa Monopole v OHIM — Spa-Finders Travel Arrangements (SPA-FINDERS), T‑67/04, ECR, EU:T:2005:179, paragraph 51). In other words, this concerns the risk that the image of the mark with a reputation or the characteristics which it projects are transferred to the goods covered by the mark applied for, with the result that the marketing of those goods is made easier by that association with the earlier mark with a reputation (judgment of 22 March 2007 in Sigla v OHIM — Elleni Holding (VIPS), T‑215/03, ECR, EU:T:2007:93, paragraph 40).

48      In order to determine whether the use of the mark applied for takes unfair advantage of the repute of the earlier mark, a link in the mind of the relevant public must be established between the signs at issue and the goods concerned. To assess the existence of such a link, it is necessary to carry out a global assessment, which takes into account all the factors relevant to the circumstances of the case, including, inter alia, the strength of the earlier mark’s reputation and the degree of the earlier mark’s distinctive character, the degree of similarity between the marks at issue, and the nature and degree of closeness between those goods or services (see, by analogy, judgment in Intel Corporation, paragraph 38 above, EU:C:2008:655, paragraphs 41 and 42).

49      However, the existence of that link is not sufficient, in itself, to establish that there is a risk that use of the sign takes unfair advantage of the repute of the earlier mark (see, to that effect, order in Japan Tobacco v OHIM, C‑136/08 P, EU:C:2009:282, paragraph 37, and judgment in Intel Corporation, paragraph 38 above, EU:C:2008:655, paragraph 32).

50      The advantage arising from the use by a third party of a mark similar to a mark with a reputation is an advantage taken unfairly by that third party of the distinctive character or the repute of the mark where that party seeks by that use to ride on the coat-tails of that mark with a reputation in order to benefit from the power of attraction, the reputation and the prestige of that mark and to exploit, without paying any financial compensation, the marketing effort expended by the proprietor of the earlier mark in order to create and maintain the mark’s image (see, by analogy, judgment of 18 June 2009 in L’Oréal and Others, C‑487/07, ECR, EU:C:2009:378, paragraph 50).

51      To establish that the use of the mark applied for takes unfair advantage of the distinctive character or the repute of the earlier mark evidence is required of an association of the mark applied for with the positive qualities of the identical or similar earlier mark, which could give rise to manifest exploitation or free-riding by the mark applied for (order in Japan Tobacco v OHIM, paragraph 49 above, EU:C:2009:282, paragraph 39).

52      Finally, it is possible, particularly in the case of an opposition based on a mark with an exceptionally high reputation, that the probability of a future, non-hypothetical risk of detriment to the earlier mark or of unfair advantage being taken of it by the mark applied for is so obvious that the opposing party does not need to put forward and prove any other fact to that end. However, it cannot be presumed that such will always be the case. Indeed, it is possible that the mark applied for does not, at first sight, appear capable of giving rise to one of the three types of risk covered by Article 8(5) of Regulation No 207/2009 with respect to the earlier mark with a reputation, even though it is identical with or similar to the earlier mark. In those circumstances, the opposition must be rejected as unfounded unless such a non-hypothetical, future risk of detriment or unfair advantage can be established by other evidence which it is for the opposing party to put forward and prove (judgment in VIPS, paragraph 47 above, EU:T:2007:93, paragraph 48).

53      It follows from the arguments put forward in paragraphs 47 to 51 above that, in order to establish that there is a risk of free-riding, as provided for in Article 8(5) of Regulation No 207/2009, it is necessary to examine whether the relevant public is likely to establish a link between the signs at issue for the goods concerned, and, if so, to verify whether the proprietor of the mark applied for is capable of exploiting that link for the marketing of the goods covered by that mark.

54      As regards, first, the link between the marks at issue in the mind of the relevant public, the Board of Appeal correctly found that the earlier marks were highly reputed in the Member States considered. Even though it took the view that the degree of similarity of the marks was perhaps insufficient to give rise to a likelihood of confusion, the Board of Appeal found that the goods to be compared (‘machines for professional and industrial processing of wood and green waste; professional and industrial wood chippers and shredders’ and ‘machine tools’ or, if a sub-category must be made ‘garden tools’) were identical or very similar. Consequently, the Board of Appeal correctly found that the relevant public (which, according to the Board of Appeal, is the same for all the marks to be compared) might establish a link between the opposing signs.

55      As regards, secondly, the risk that the applicant will take unfair advantage of the reputation or the distinctive character of the earlier marks, the Board of Appeal stated, in paragraph 36 of the contested decision, that those marks were highly reputed and long-standing, that those marks were highly distinctive per se, having regard inter alia to the goods concerned and, that the goods covered by the marks at issue were identical or similar, or were used in related sectors. That distinctive character meant that use of the head of a wolf by a third party for similar goods would risk a dilution of the unique image propagated by the earlier marks. Having noted that the representations of the wolf’s head in the compared marks had a certain degree of similarity, the Board of Appeal found that the use of the image of such a canine’s head in the trade mark applied for could bring to mind, strongly and immediately, the distinctive, memorable element of the earlier marks.

56      In that regard, it should be noted, first, that the reasoning used by the Board of Appeal to conclude that there was a risk of free-riding is particularly succinct and that it refers essentially to the long-standing reputation and highly distinctive character of the earlier marks.

57      Secondly, it must be found that, as the applicant submits, that reasoning makes no reference to the existence of any particular quality associated with the earlier marks that is capable of being transferred to the goods covered by the mark applied for, or to the likelihood of such a transfer happening in the commercial sector concerned. The fact that the earlier marks have a long-standing reputation and that they are highly distinctive does not necessarily mean that the image that they convey can be transferred to the goods covered by the mark applied for and, therefore, that their power of attraction, reputation or prestige could be useful to the proprietor of that mark for the marketing of those goods.

58      Thirdly, it does not at all follow from the reasoning used in paragraph 36 of the contested decision that the Board of Appeal found that the earlier marks had an exceptionally high reputation from which it might be presumed, in accordance with the case-law in VIPS (judgment in VIPS, paragraph 47 above, EU:T:2007:93, paragraph 48), cited in paragraph 52 above, that the probability of a risk of free-riding was so obvious that it was no longer necessary to verify whether the image of the earlier marks or the characteristics projected by those marks could be transferred to the goods covered by the mark applied for. Neither does it follow that the Board of Appeal found that the probability of a risk of free-riding could be presumed by applying that case-lase by analogy to cases, such as the instant case, in which earlier marks have a long-standing reputation and a very distinctive character.

59      It must therefore be held that the grounds raised in paragraph 36 of the contested decision did not allow the Board of Appeal to find that there was a risk of free-riding.

60      The arguments put forward by the intervener and OHIM cannot cast doubt on that finding.

61      The intervener, for its part, refers inter alia to paragraph 44 of the judgment in L’Oréal and Others, paragraph 50 above (EU:C:2009:378), according to which it is necessary, in order to determine whether there is a risk of free-riding, to undertake a global assessment, taking into account all factors relevant to the circumstances of the present case, which include the strength of the mark’s reputation and the degree of distinctive character of the mark, the degree of similarity between the marks at issue and the nature and degree of proximity of the goods or services concerned.

62      In that regard, it is necessary to point out that the reasoning used by the Board of Appeal in order to describe the risks resulting from the use of the mark applied for is particularly succinct and that it is not always clear whether that reasoning addresses the risk of dilution or the risk of free-riding. Paragraph 36 of the contested decision does not even refer to the risk of free-riding. In any event, the few sentences and references made to the reputation and highly distinctive character of the earlier marks do not allow the conclusion that the Board of Appeal actually carried out a global assessment taking into account all of the relevant factors of the present case.

63      Furthermore, it must be noted that the facts that gave rise to the judgment in L’Oréal and Others, paragraph 50 above (EU:C:2009:378), did not concern, as the present case does, a prospective analysis regarding the advantage that the proprietor of the mark applied for could take, in the future, of the image conveyed by the earlier marks, but an analysis of the material facts that actually occurred on the market. That case concerned a reference for a preliminary ruling made in the context of infringement proceedings brought by the proprietors of reputed marks against competing producers of perfume which referred to the trade marks in the lists that those producers sent to their retailers in order to promote the marketing of their own perfumes.

64      As regards OHIM’s submissions, it must be pointed out that its argument that the reminiscence of the earlier marks and their ‘aura’ of quality triggered an immediate positive association which would benefit the contested mark had been put forward for the first time before the General Court and that it does not appear in the contested decision. The same applies to OHIM’s argument that the goods covered by the mark applied for can be sold at the same retail outlets as those covered by the earlier marks. In the contested decision, the Board of Appeal confined itself to stating, referring to the arguments put forward by the applicant, that the mark applied for might dilute the unique image of the earlier marks and take unfair advantage of their distinctive character or their reputation, without assessing the likelihood of association of the mark applied for with the particular positive qualities of the earlier marks.

65      In the light of the above, the applicant’s second complaint, alleging infringement of Article 8(5) of Regulation No 207/2009, in so far as the Board of Appeal found that there was a risk of free-riding, must be upheld.

66      It follows that the contested decision must be annulled.

 Costs

67      In the judgment on appeal, the Court of Justice reserved the costs. It is therefore for this Court to rule in this judgment on all the costs relating to the various proceedings, in accordance with Article 121 of the Rules of Procedure.

68      Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

69      Since OHIM and the intervener have been unsuccessful, they must be ordered to bear their own costs and, in addition, to pay those incurred by the applicant in proceedings before the General Court and the Court of Justice, in accordance with the form of order sought by the applicant. OHIM and the intervener must each pay half of those costs.

On those grounds,

THE GENERAL COURT (Seventh Chamber)

hereby:

1.      Annuls the decision of the Second Board of Appeal of the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) of 6 October 2010 (Case R 425/2010-2);

2.      Orders OHIM to bear its own costs before the General Court and the Court of Justice, as well as half of those incurred by Environmental Manufacturing LLP before the General Court and the Court of Justice;

3.      Orders Société Elmar Wolf to bear its own costs before the General Court and the Court of Justice, as well as half of those incurred by Environmental Manufacturing before the General Court and the Court of Justice.

Van der Woude

Wiszniewska-Białecka

Ulloa Rubio

Delivered in open court in Luxembourg on 5 February 2015.

[Signatures]